FAST NEWS: XXG’s revenue grows, but profit falls on one-time factors
The Latest: Auto finance and leasing company XXF Group Holdings Ltd. (2473.HK) said on Monday it expects to report a net profit of 19 million yuan or more ($2.67 million) for the first half of this year, down as much as 69.6% year-on-year.
Looking Up: The company said its revenue rose to 650 million yuan or more in the first half of the year from 601 million yuan a year earlier as it deepened its sales network and enhanced its sales capacity.
Take Note: The big profit decline owed largely to a one-time 46.3 million gain in the year-ago period related to changes in the value of ordinary shares with redemption rights in the first half of 2023. The company’s first-half profit this year was also partially offset by option expenses arising from its pre-IPO share option scheme.
Digging Deeper: XXF Group was founded in 2007 by entrepreneur Huang Wei, and started out in the auto rental business. Sensing an opportunity, it shifted to selling vehicles through financed leasing, and experienced rapid growth. The company went public on Beijing’s National Equities Exchange and Quotations (NEEQ) board in 2015 but left the market a year later due to thin trading volumes. It submitted six applications between 2019 and 2022 to list in Hong Kong, and finally succeeded on its seventh try with its IPO last November.
Market Reaction: XXF Group’s shares rose on Tuesday and closed up 5% at HK$6.23 by the midday break. The stock now trades 466% higher than its IPO price of HK$1.10.
Translation by A. Au
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